Goldman Sachs' job cuts a reminder that MDs in Milan not safe
When we ran the survey underpinning our 2023 compensation survey earlier this year, there was quite a bit of gloating from respondents working outside London in European cities. Yes, they are paid lower bonuses than their London colleagues, but their jobs are safer, they said. Their 'European contracts' are a hedge against being laid off.
Goldman Sachs' recent managing director redundancies suggest this isn't necessarily the case, or at least not at a senior level. While it's difficult to cut junior bankers in continental Europe, it's comparatively much easier to cut senior bankers. When cost-cutting is necessary, this means senior bankers on the continent are more likely to get dumped.
Goldman Sachs was mostly cutting managing directors anyhow in its most recent round of layoffs, but it was notable that at least two of the 25 MDs it let go in Europe were in Milan: Sara Burigo, the head of convertible bond sales for Europe, who moved to the Italian city from London in September 2021, and Angelo Diotisalvi, a managing director in FIG financing for Southern Europe.
We didn't speak to Burigo or Diotisalvi, but senior Italian bankers say it's unsurprising that Goldman's cuts included them.
"It's easy to get rid of people in Milan if they are Dirigenti," says one senior banker in the Italian city. "It's not at all easy if they're not."
Dirigenti are defined as executives in Italian employment law. They can be laid off within 60 days when an economic reason can be given for their dismissal. For all other staff, Italian employers need to go through a more complex process, including - when more than 50 staff are involved, a 90-day consultation period involving unions and local government labour authorities.
Even when fewer than 50 people are being let go, the senior Italian banker, says banks in Milan err in favour of cutting dirigenti - or MDs. "We typically just move more junior people within the group, or put them into early retirement by giving them their pensions early," he says. "It's the same in Frankfurt and other European hubs."
It's not just Goldman Sachs that's been cutting senior people in Italy. Unicredit removed much of the upper ranks in its sales and trading business in late 2022.
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